Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Containers & Packaging industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Containers & Packaging Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Containers & Packaging Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Containers & Packaging industry for Friday, October 04, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Containers & Packaging industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Berry Global Group, Inc.’s Value Grade

Value Grade:

Berry Global Group, Inc. manufactures and supplies non-woven, flexible, and rigid products in consumer and industrial end markets in the United States, Canada, Europe, and internationally. The company operates through Consumer Packaging International; Consumer Packaging North America; Engineered Materials; and Health, Hygiene & Specialties segments. The Consumer Packaging International segment offers closures and dispensing systems, pharmaceutical devices and packaging, bottles and canisters, containers, and technical components. The Consumer Packaging North America segment provides containers and pails, foodservice products, closures, bottles and prescription vials, and tubes. The Engineered Materials segment offers stretch and shrink, converter, food and consumer, and agriculture films, as well as institutional can liners and retail bags. The Health, Hygiene & Specialties segment provides healthcare, hygiene, specialties, and tapes. Berry Global Group, Inc. sells its products through direct sales force of professionals and distributors. The company was formerly known as Berry Plastics Group, Inc. and changed its name to Berry Global Group, Inc. in April 2017. Berry Global Group, Inc. was founded in 1967 and is based in Evansville, Indiana.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Berry Global Group, Inc. has a Value Score of 71, which is considered to be undervalued.

When you look at Berry Global Group, Inc.’s price-to-sales ratio at 0.63 compared to the industry median at 0.92, this company has a lower price relative to revenue compared to its peers. This could make Berry Global Group, Inc.’s stock more attractive for value investors.

Berry Global Group, Inc.’s price-earnings ratio is 14.40 compared to the industry median at 23.80. This means it has a lower share price relative to earnings compared to its peers. This could make Berry Global Group, Inc. more attractive for value investors.

Now, let’s assess Berry Global Group, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 12.3, when compared to the industry median of 10.9, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Berry Global Group, Inc.’s shareholder yield is higher than its industry median ratio of 2.40%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Berry Global Group, Inc.’s price-to-book ratio is higher than its industry median ratio of 2.36. This could make Berry Global Group, Inc. fairly attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Berry Global Group, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Berry Global Group, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 47.70. This could make Berry Global Group, Inc. more attractive because the lower P/FCF ratio indicates that Berry Global Group, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Millennium Group International Holdings Limited’s Value Grade

Value Grade:

Millennium Group International Holdings Limited, an investment holding company, provides paper-based packaging solutions in Mainland China, Hong Kong, Vietnam, rest of Southeast Asian countries, Australia, the United States, and internationally. The company offers paper packaging products, including cardboard boxes, gift boxes, displays, corrugated outer cartons, manuals, and user guides to footwear products, sportswear, cookware and kitchenware, smartphones, food and beverage, paper and packaging, non-food-and-beverage-consumables, logistics, e-commerce, and home electronics industries; and packaging solutions to various luxury products industries. It also provides packaging products supply chain management solutions, and board games and various board game accessories. The company was founded in 1978 and is headquartered in Kwun Tong, Hong Kong. Millennium Group International Holdings Limited operates as a subsidiary of YC 1926 (BVI) Limited.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Millennium Group International Holdings Limited has a Value Score of 70, which is considered to be undervalued.

Millennium Group International Holdings Limited’s price-to-book ratio is higher than its peers. This could make Millennium Group International Holdings Limited less attractive for value investors when compared to the industry median at 2.36.

You can read more about Millennium Group International Holdings Limited’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Pactiv Evergreen Inc.’s Value Grade

Value Grade:

Pactiv Evergreen Inc. manufactures and distributes fresh foodservice and food merchandising products, and fresh beverage cartons in the United States, rest of North America, and internationally. It operates in two segments, Foodservice, and Food and Beverage Merchandising. The Foodservice segment offers food containers; drinkware, such as hot and cold cups and lids; and tableware, service ware, and other products. The Food and Beverage Merchandising segment manufactures cartons for fresh refrigerated beverage products, including dairy, juice, and other specialty beverage; clear rigid-display containers, containers for prepared and ready-to-eat food, and trays for meat and poultry and egg cartons; fiber-based liquid packaging board; and supplies fresh carton systems comprises printed cartons, spouts, and filling machinery. It serves its products to full-service restaurants, quick service restaurants, foodservice distributors, supermarkets, grocery and healthy eating retailers, other food stores, food and beverage producers, and food packers and food processors. The company was formerly known as Reynolds Group Holdings Limited. The company was founded in 1880 and is headquartered in Lake Forest, Illinois. Pactiv Evergreen Inc. is a subsidiary of Packaging Finance Limited.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Pactiv Evergreen Inc. has a Value Score of 61, which is considered to be undervalued.

Pactiv Evergreen Inc.’s price-earnings ratio is 27.7 compared to the industry median at 23.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Pactiv Evergreen Inc. less attractive for value investors.

Pactiv Evergreen Inc.’s price-to-book ratio is higher than its peers. This could make Pactiv Evergreen Inc. less attractive for value investors when compared to the industry median at 2.36.

You can read more about Pactiv Evergreen Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Containers & Packaging Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Containers & Packaging stocks as well as other industrys.

Choosing Which of the 3 Best Containers & Packaging Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Berry Global Group, Inc. stock has a Value Grade of B.
• Millennium Group International Holdings Limited stock has a Value Grade of B.
• Pactiv Evergreen Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Containers & Packaging industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Containers & Packaging Stocks

Want to learn more about Containers & Packaging stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Containers & Packaging Stocks for Friday, October 04
• Why O-I Glass Inc’s (OI) Stock Is Up 5.76%
• Why Sealed Air Corporation’s (SEE) Stock Is Up 4.15%
• 3 Undervalued Non-Paper Containers & Packaging Stocks for Friday, September 20

AAII Disclaimer

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